REG - Legal & General Grp - Q3 2014 Interim Management Statement <Origin Href="QuoteRef">LGEN.L</Origin> - Part 1
RNS Number : 0465WLegal & General Group Plc04 November 2014LEGAL & GENERAL GROUP PLC QUARTER 3 2014 INTERIM MANAGEMENT STATEMENT
Stock Exchange Release
4 November 2014
GROWTH IN ALL DIVISIONS. NET CASH UP 12%.
GROUP HIGHLIGHTS:
OPERATIONAL CASH UP 8% TO 844M (Q3 YTD 2013: 780M)
net cash up 12% to 827m (q3 YTD 2013: 740m)
BUSINESS HIGHLIGHTS:
ANNUITY ASSETS UP 16% TO 39.9BN (Q3 2013: 34.5BN)
LGIM TOTAL ASSETS UP 14% TO 676.3BN (Q3 2013: 594.0BN)
UK PROTECTION PREMIUM UP 6% TO 1,077M (Q3 YTD 2013: 1,016M)
SAVINGS AUA UP 13% TO 119.7BN (Q3 2013: 106.2BN)
LGC DIRECT INVESTMENTS INCREASED TO 4.6BN (Q3 2013: 2.1BN)
LGA PREMIUM UP 10% TO $824M (Q3 YTD 2013: $746M)
Nigel Wilson, Group Chief Executive, said:
"We are growing our revenues, operating profit, customers and net cash and are continuing to deliver strong ROE.
LGR completed a record 3.9 billion of annuity sales in the nine months to September, which coupled with an internal transfer in Q3, increased total annuity transactions to 5.8 billion. Of this, only around 0.5 billion was from the individual annuity market. To date in Q4, LGR has secured a further 0.8 billion of bulk premium and our immediate pipeline gives us high confidence in writing around 8 billion in total annuity transactions for the full year, double our total annuity premium for 2013.
Over the last year LGIM's total assets increased by 82 billion from 594 billion to 676 billion. International assets now exceed 86 billion, and have trebled in the last four years. We experienced net outflows in our UK index business, these were more than offset by strong demand for our market leading LDI strategies.
Our UK Insurance businesses delivered another strong performance, with Retail Protection growing its sales by 18%. Workplace Savings passed the 10 billion AUA milestone and Cofunds AUA in the last year increased by 11 billion to 69 billion.
Direct investments total 4.6 billion and we are committed to our 15 billion target over the medium term. CALA, LGC's principal investment in UK house building, achieved record profits and is on track to treble its sales to 800 million by 2016.
We remain confident in our ability to deliver economically and socially useful products for our customers and strong and sustainable growth for our shareholders. Recent market volatility is a reminder of the on-going market uncertainty that still exists and whilst no model can be completely immunised, we believe our strategy creates a high degree of resilience."
GROUP CASH GENERATION
m
Q3 2014
Q3 2013
Growth %
9 months to 30 September
Operational cash generation
844
780
8
New business strain
(17)
(40)
58
Net cash generation
827
740
12
LEGAL & GENERAL RETIREMENT (LGR)
bn
Q3 2014
Q3 2013
Growth %
9 months to 30 September
Annuity sales
3.9
3.7
5
Internal transfer from with-profits
1.9
-
n/a
Total annuity transactions
5.8
3.7
58
Annuity net inflows
2.3
2.3
-
Annuity assets
39.9
34.5
16
LEGAL & GENERAL INVESTMENT MANAGEMENT (LGIM)
bn
Q3 2014
Q3 2013
Growth %
9 months to 30 September
Total net flows
8.0
20.7
(61)
International net flows
7.2
14.0
(49)
LGIM total assets1
676.3
594.0
14
LEGAL & GENERAL ASSURANCE SOCIETY (LGAS)
m
Q3 2014
Q3 2013
Growth %
9 months to 30 September
UK Protection new business sales
178
162
10
UK Protection gross premiums
1,077
1,016
6
General Insurance gross premiums
282
280
1
Savings net flows (bn)
4.0
3.3
21
Savings AUA (bn)
119.7
106.2
13
LEGAL & GENERAL CAPITAL (LGC)
bn
Q3 2014
Q3 2013
Growth %
Direct Investments
4.6
2.1
119
LEGAL & GENERAL AMERICA (LGA)
$m
Q3 2014
Q3 2013
Growth %
9 months to 30 September
New business sales
117
113
4
Gross premiums
824
746
10
1. LGIM total assets includes 477bn (Q3 2013: 443bn) of AUM and 199bn (Q3 2013: 151bn) of derivative overlay and GIA advisory assets.
Financial HIGHLIGHTS
Operational cash generation for the Group is up 8% to 844m in the first nine months of the year (Q3 YTD 2013: 780m). New business strain of 17m (Q3 YTD 2013: 40m) primarily reflects improved efficiency and increasing scale in UK Protection and Savings. As a result net cash generation is up 12% at 827m (Q3 2013 YTD: 740m). New business strain excludes any impact of the internal transfer of annuities from with-profits to our shareholder fund.
BUSINESS HIGHLIGHTS
Legal & General Retirement (LGR)
Total annuity assets increased by 16% to 39.9bn (Q3 2013: 34.5bn) with annuity sales increasing 5% to 3.9bn (Q3 YTD 2013: 3.7bn) and reflecting net flows of 2.3bn Q3 YTD.
We have demonstrated the strength and flexibility of our franchise, more than offsetting reduced individual annuity sales with record bulk annuity transactions. Bulk annuity sales increased 29% to 3,368m (Q3 YTD 2013: 2,613m). In addition we completed the internal transfer of 1,953m of annuities from with-profits to our shareholder fund in July, bringing the total volume of annuity business that delivers value to our shareholders, to 5,829m Q3 YTD. These sales have been achieved whilst maintaining strong pricing discipline across all of our annuity products.
Following the Budget reforms, individual annuity sales in the quarter reduced to 125m (Q3 2013: 323m), down 61%, with total sales in the nine months to September of 508m (Q3 2013: 1,077m), down 53% compared to the first nine months of 2013.
Legal & General Investment Management (LGIM)
LGIM total assets increased 14% to 676.3bn (Q3 2013: 594.0bn) reflecting net flows of 8.0bn (Q3 YTD 2013: 20.7bn) and positive market movements.
As a leading and long-standing DB pension fund manager we have positioned our business to capitalise on the de-risking trend of assets backing UK defined benefit (DB) pension schemes. We continue to see strong demand for our liability driven investment (LDI) strategies, with LDI assets increasing 22% to 273.0bn (Q3 2013: 222.9bn). Net flows of 18.4bn YTD (Q3 YTD 2013: 14.1bn) more than offset our Index outflows. Total net outflows in Index funds for Q3 YTD were (11.8)bn (Q3 YTD 2013: inflows of 2.4bn) reflecting this de-risking trend and lower international institutional index mandate wins.
Total international assets increased by 45% to 86.5bn (Q3 2013: 59.6bn), with new flows of 7.2bn (Q3 YTD 2013: 14.0bn). In the US, we saw further inflows into our liability driven investment (LDI) and active fixed income (AFI) business, with AUM increasing 119% to $77.4bn (Q3 2013 $35.3bn), including GIA assets, acquired in May 2014, of $23bn. We have also recently developed an index manufacturing capability in the US, which forms part of our on-going initiative to globalise our Index business and leverage key capabilities.
LGIM's property business has experienced increased demand from retail clients and UK pension funds, with net flows for the period of 1.1bn (Q3 YTD 2013: 0.6bn). AUM increased 27% to 13.2bn at Q3 2014 (Q3 2013: 10.4bn).
Legal & General Assurance Society (LGAS)
UK Protection sales grew by 10% to 178m (Q3 YTD 2013: 162m) with new business of 55m (Q3 2013: 57m) in the quarter.
Retail Protection grew sales by 18% to 124m (Q3 YTD 2013: 105m) with new business of 41m in Q3 (Q3 2013: 40m). We are the largest provider of retail protection in the UK and benefit from a highly efficient automated underwriting model and broad distribution reach. We have underwritten in excess of 82% of applications at point of sale and in July further extended our distribution to include the customers of TSB. Direct Retail Protection APE continues to grow and now accounts for 16% of business YTD (Q3 2013 YTD: 13%).
Group Protection sales were lower in Q3 at 14m (Q3 2013: 17m) as we maintained price discipline. In the UK we have achieved sales of 54m YTD (Q3 YTD 2013: 57m). Our French business, including Group Protection, saw sales increase 27%, to 65m (Q3 YTD 2013: 51m) leveraging our powerful UK franchise.
In total the LGAS Savings business increased AUA by a further 13% to 119.7bn (Q3 2013: 106.2bn) reflecting net inflows of 4.0bn YTD.
Our Workplace platform AUA has increased 28% to 10.1bn (Q3 2013: 7.9bn), reflecting net flows of 1.5bn (Q3 YTD 2013: 1.1bn). Opt out rates remain low at less than 10% and our platform now has 1,156k customers and 2,159 schemes (Q3 2013: 779k customers, 1,707 schemes).
Cofunds generated further strong net inflows of 4.0bn Q3 YTD (Q3 2013 YTD: 4.3bn) as RDR continues to drive business to platforms. As a result AUA on the platform increased 18% to 69.0bn (Q3 2013: 58.3bn). LGIM funds on the Cofunds platform increased to 4.8bn (Q3 2013: 4.5bn). We continue to leverage our existing bank and building society relationships and have launched shortened approved fund panels, with a higher representation of LGIM funds, to meet evolving customer needs.
LEGAL & GENERAL CAPITAL (LGC)
Total direct investment across the principal balance sheet at Q3 was 4.6bn (Q3 2013: 2.1bn), consistent with the value reported at 30 June 2014. We acquired 115m of new property loans on behalf of LGR and financed our equity holding in Pemberton, the SME lending business. CALA, which recently reported record annual pre-tax profits of 27m on revenues of 294m, is on track to achieve turnover in excess of 800m by 2016. LGC continues to deliver on urban regeneration projects, specifically in Bracknell, Salford, Plymouth, Canning Town, Wakefield and Liverpool. During the quarter we also successfully completed a number of disposals in the portfolio, totalling 308m.
Legal & General America (LGA)
LGA delivered lower Q3 sales of $39m (Q3 2013: $43m) as a result of the price changes introduced in May. Sales YTD were $117m (Q3 YTD 2013: $113m). Our Q3 mortality experience was broadly in line with assumptions across our total portfolio, however we continue to monitor emerging mortality experience at longer durations, together with lapse assumptions, to ensure our reserving basis remains appropriate.
outlook
Our businesses remain focussed on large markets where we see long term structural growth potential. Our strategic clarity together with our scale, efficiency and track record mean that we are very well placed to take advantage of macro trends and continue to grow the business stock. Recent market volatility is a reminder of the on-going market uncertainty that still exists and whilst no model can be completely immunised, we believe our strategy creates a high degree of resilience.
In LGR we expect to write significant bulk annuity business. Integrated asset management; longevity expertise; ALM (LDI) capability; strong capital position; and our three decade track record continue to set us apart in the bulk market. While the exact timing of transactions can depend on external factors, the strength and visibility of our pipeline gives us a high degree of confidence in doubling the total annuity transactions we wrote in 2013 to around 8 billion.
We will have a range of individual retirement products available for April 2015 to address consumer needs in an evolving market.
LGIM, as the largest manager of UK DB pension scheme assets with a circa 20% market share, was an early identifier of the de-risking trend and now has a circa 40% market share of the UK LDI market. We expect demand for our LDI strategies to remain strong and further outflows of Index assets managed on behalf of UK DB clients. We are creating differentiated new products targeted at the emerging growth in UK defined contribution (DC) savings, capitalising on auto-enrolment. Internationally, our US business continues to gather momentum as we expand our distribution capabilities and product offering and are seeing strong demand for our LDI and active fixed income products.
In LGAS we are expanding our distribution capabilities and customer base to capitalise on anticipated growing levels of personal retirement savings and changes in welfare provision. We expect our Retail Protection business to remain a strong market leader. Our Workplace Savings business is one of the biggest providers of auto-enrolment solutions in the UK and will capitalise on increased DC savings, with an anticipated 12 million auto-enrolled savers in the market by 2030, three times today's levels.
In LGC, we intend to invest 15 billion in direct investment over the medium term, matching the illiquid nature of our liabilities and solvency capital requirements to deliver more attractive risk adjusted returns to our shareholders. We expect to grow our housing related business and see good opportunities in the private rented sector and for further urban regeneration projects.
In LGA, following the price changes introduced in May, we expect the lower level new business volumes experienced in Q3 to continue going forward. Delivering further dividends to the Group will remain a key focus for LGA.
We reiterate the operational cash guidance we gave at the 2013 full year results to deliver operational cash generation in 2014 from LGR of around 290m (2013: 260m), from LGAS excluding General Insurance of around 430m (2013: 421m) and from LGA of around 46m (2013: 44m).
Enquiries
Investors:
Laura DoyleHead of Investor Relations 020 3124 2088
Stephen Thomas Investor Relations Manager 020 3124 2047
Media:
John GodfreyGroup Communications Director 020 3124 2090
Richard King Head of Media Relations 020 3124 2095
Michelle ClarkeTulchan Communications 020 7353 4200Katharine Wynne Tulchan Communications 020 7353 4200
Notes
ANALYST CALL DETAILS:
A copy of this announcement can be found in "Results", under the "Financial information" section of our shareholder website athttp://www.legalandgeneralgroup.com/investors/results.cfm
There will be a teleconference at 09.30 GMT. Investors should dial +44 (0)20 3059 8125. A replay of the teleconference can be accessed by dialling +44 (0)121 260 4861 (PIN code:1072631#).
FINANCIAL CALENDAR 2014:
Date
Preliminary Results 2014
4 March 2015
Q1 2015 Interim Management Statement
6 May 2015
Half-year Results 2015
5 August 2015
Q3 2015 Interim Management Statement
4 November 2015
DEFINITIONS:
Operational cash generation is the expected release from in-force business for the UK non-profit LGAS and LGR businesses, the shareholder's share of bonuses on with-profits business, the post-tax operating profit on other UK businesses, including the expected investment return on LGC invested assets, and dividends remitted from our international businesses.
Net cash generation is defined as operational cash generation less new business strain.
The Group's principal balance sheet includes those assets to which shareholders are exposed, excluding assets where our customers have the total market risk and reward.
FORWARD LOOKING STATEMENTS:
This announcement may contain certain forward-looking statements relating to Legal & General, its plans and its current goals and expectations relating to future financial condition, performance and results. By their nature, forward-looking statements involve uncertainty because they relate to future events and circumstances which are beyond Legal & General's control, including, among others, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory and Governmental authorities, the impact of competition, the timing impact of these events and other uncertainties of future acquisition or combinations within relevant industries. As a result, Legal & General's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in these forward-looking statements and persons reading this announcement should not place reliance on forward-looking statements. These forward-looking statements are made only as at the date on which such statements are made and Legal & General Group Plc does not undertake to update forward-looking statements contained in this announcement or any other forward-looking statement it may make.
Asset and Premium Flows
Legal & General investment management assets
Active
GIA
Index
fixed
Solu-
Active
Total
Overlay
advisory
Total
For the nine months
funds
interest
tions1
Property
equities
AUM
assets2
assets
assets
ended 30 September 2014
bn
bn
bn
bn
bn
bn
bn
bn
bn
As at 1 January 2014
269.8
89.4
70.4
11.3
8.6
449.5
162.1
-
611.6
Acquisition of GIA assets
-
-
-
-
-
-
-
13.4
13.4
External inflows
15.9
5.1
6.0
0.9
0.1
28.0
28.0
External outflows
(27.7)
(4.4)
(3.5)
(0.4)
(0.1)
(36.1)
(36.1)
Overlay / GIA advisory net flows
-
-
-
-
-
-
14.8
0.1
14.9
External net flows3
(11.8)
0.7
2.5
0.5
-
(8.1)
14.8
0.1
6.8
Internal net flows
-
(0.2)
1.1
0.6
(0.3)
1.2
-
-
1.2
Total net flows
(11.8)
0.5
3.6
1.1
(0.3)
(6.9)
14.8
0.1
8.0
Market and other
movements3
12.5
7.6
13.7
0.8
(0.4)
34.2
8.4
0.7
43.3
As at 30 September 2014
270.5
97.5
87.7
13.2
7.9
476.8
185.3
14.2
676.3
Assets attributable to:
External
392.0
185.3
14.2
591.5
Internal
84.8
-
-
84.8
1. Solutions includes liability driven investments and multi-asset funds.
2. Overlay assets comprise derivative notionals associated with Solutions business.
3. External net flows exclude movements in overlay assets which have a short maturity period as determined by client agreements (Q3 14: 41.2bn; Q3 13: 24.3bn;
FY 13: 32.8bn), and hence are subject to a higher degree of variability. The movement in these assets is therefore included in market and other movements.
Active
Index
fixed
Solu-
Active
Total
Overlay
Total
For the nine months
funds
interest
tions1
Property
equities
AUM
assets2
assets
ended 30 September 2013
bn
bn
bn
bn
bn
bn
bn
bn
As at 1 January 2013
243.2
82.2
64.0
8.9
7.7
406.0
136.7
542.7
External inflows
25.2
8.3
7.9
0.7
0.1
42.2
42.2
External outflows
(23.3)
(3.4)
(3.5)
(0.2)
(0.4)
(30.8)
(30.8)
Overlay net flows
-
-
-
-
-
-
9.0
9.0
External net flows3
1.9
4.9
4.4
0.5
(0.3)
11.4
9.0
20.4
Internal net flows
0.5
(0.9)
0.7
0.1
(0.1)
0.3
-
0.3
Total net flows
2.4
4.0
5.1
0.6
(0.4)
11.7
9.0
20.7
Market and other
movements3
19.4
1.5
2.4
0.9
0.7
24.9
5.7
30.6
As at 30 September 2013
265.0
87.7
71.5
10.4
8.0
442.6
151.4
594.0
Assets attributable to:
External
364.4
151.4
515.8
Internal
78.2
-
78.2
1. Solutions includes liability driven investments and multi-asset funds.
2. Overlay assets comprise derivative notionals associated with Solutions business.
3. External net flows exclude movements in overlay assets which have a short maturity period as determined by client agreements (Q3 13: 24.3bn), and hence are
subject to a higher degree of variability. The movement in these assets is therefore included in market and other movements.
Legal & General investment management assets (continued)
9
9
12
months
months
months
to
to
to
30.09.14
30.09.13
31.12.13
bn
bn
bn
LGIM total assets net flows
8.0
20.7
20.3
Attributable to:
International1
7.2
14.0
15.8
UK Institutional
0.6
7.4
5.8
UK Retail2
0.5
0.3
0.4
Annuities3,4
2.8
1.5
1.4
Mature Businesses
(3.1)
(2.5)
(3.1)
1. Q3 13 and FY 13 International net flows include 2.9bn of Legal & General France assets.
2. Q3 14 UK Retail net flows include 0.7bn of assets previously managed externally.
3. Pension funds already managed by LGIM that switch into LGR annuities are excluded.
4. Q3 14 Annuities net flows include 0.3bn of Lucida assets previously managed externally.
Legal & General investment management assets quarterly progression
Active
GIA
Index
fixed
Solu-
Active
Total
Overlay
advisory
Total
For the nine months
funds
interest
tions1
Property
equities
AUM
assets2
assets
assets
ended 30 September 2014
bn
bn
bn
bn
bn
bn
bn
bn
bn
At 1 January 2014
269.8
89.4
70.4
11.3
8.6
449.5
162.1
-
611.6
External inflows
4.7
1.9
2.1
0.3
-
9.0
9.0
External outflows
(5.7)
(1.0)
(1.2)
(0.1)
-
(8.0)
(8.0)
Overlay net flows
-
-
-
-
-
-
5.2
-
5.2
External net flows3
(1.0)
0.9
0.9
0.2
-
1.0
5.2
-
6.2
Internal net flows
0.1
2.0
0.3
0.5
(0.1)
2.8
-
-
2.8
Total net flows
(0.9)
2.9
1.2
0.7
(0.1)
3.8
5.2
-
9.0
Market and other
movements3
1.5
2.9
4.9
(0.1)
0.1
9.3
1.0
-
10.3
At 31 March 2014
270.4
95.2
76.5
11.9
8.6
462.6
168.3
-
630.9
Acquisition of GIA assets
-
-
-
-
-
-
-
13.4
13.4
External inflows
5.8
1.8
2.6
0.3
0.1
10.6
10.6
External outflows
(13.4)
(1.5)
(0.9)
(0.1)
(0.1)
(16.0)
(16.0)
Overlay / GIA advisory net flows
-
-
-
-
-
-
7.1
0.1
7.2
External net flows3
(7.6)
0.3
1.7
0.2
-
(5.4)
7.1
0.1
1.8
Internal net flows
0.1
(1.3)
0.7
0.2
(0.1)
(0.4)
-
-
(0.4)
Total net flows
(7.5)
(1.0)
2.4
0.4
(0.1)
(5.8)
7.1
0.1
1.4
Market and other
movements3
5.8
3.0
(0.7)
0.5
(0.3)
8.3
(0.5)
0.2
8.0
At 30 June 2014
268.7
97.2
78.2
12.8
8.2
465.1
174.9
13.7
653.7
External inflows
5.4
1.4
1.3
0.3
-
8.4
8.4
External outflows
(8.6)
(1.9)
(1.4)
(0.2)
-
(12.1)
(12.1)
Overlay / GIA advisory net flows
-
-
-
-
-
-
2.5
-
2.5
External net flows3
(3.2)
(0.5)
(0.1)
0.1
-
(3.7)
2.5
-
(1.2)
Internal net flows
(0.2)
(0.9)
0.1
(0.1)
(0.1)
(1.2)
-
-
(1.2)
Total net flows
(3.4)
(1.4)
-
-
(0.1)
(4.9)
2.5
-
(2.4)
Market and other
movements3
5.2
1.7
9.5
0.4
(0.2)
16.6
7.9
0.5
25.0
At 30 September 2014
270.5
97.5
87.7
13.2
7.9
476.8
185.3
14.2
676.3
1. Solutions includes liability driven investments and multi-asset funds.
2. Overlay assets comprise derivative notionals associated with Solutions business.
3. External net flows exclude movements in overlay assets which have a short maturity period as determined by client agreements (Q1 14: 33.8bn; H1 14: 33.3bn;
Q3 14: 41.2bn) and hence are subject to a higher degree of variability. The movement in these assets is therefore included in market and other movements.
Legal & General investment management assets quarterly progression (continued)
Active
Index
fixed
Solu-
Active
Total
Overlay
Total
For the year ended
funds
interest
tions1
Property
equities
AUM
assets2
assets
31 December 2013
bn
bn
bn
bn
bn
bn
bn
bn
At 1 January 2013
243.2
82.2
64.0
8.9
7.7
406.0
136.7
542.7
External inflows
11.0
2.2
1.1
0.1
-
14.4
14.4
External outflows
(7.1)
(0.9)
(1.1)
-
(0.1)
(9.2)
(9.2)
Overlay net flows
-
-
-
-
-
-
2.5
2.5
External net flows3
3.9
1.3
-
0.1
(0.1)
5.2
2.5
7.7
Internal net flows
0.1
(0.7)
0.1
-
-
(0.5)
-
(0.5)
Total net flows
4.0
0.6
0.1
0.1
(0.1)
4.7
2.5
7.2
Market and other movements3
20.1
2.0
7.3
0.3
0.8
30.5
3.8
34.3
At 31 March 2013
267.3
84.8
71.4
9.3
8.4
441.2
143.0
584.2
External inflows
6.2
1.3
4.6
0.2
-
12.3
12.3
External outflows
(7.9)
(0.5)
(0.7)
(0.1)
(0.3)
(9.5)
(9.5)
Overlay net flows
-
-
-
-
-
-
3.2
3.2
External net flows3
(1.7)
0.8
3.9
0.1
(0.3)
2.8
3.2
6.0
Internal net flows
0.4
(0.8)
0.6
-
-
0.2
-
0.2
Total net flows
(1.3)
-
4.5
0.1
(0.3)
3.0
3.2
6.2
Market and other movements3
(3.9)
(1.9)
(5.0)
-
(0.4)
(11.2)
(0.5)
(11.7)
At 30 June 2013
262.1
82.9
70.9
9.4
7.7
433.0
145.7
578.7
External inflows4
8.0
4.8
2.2
0.4
0.1
15.5
15.5
External outflows
(8.3)
(2.0)
(1.7)
(0.1)
-
(12.1)
(12.1)
Overlay net flows
-
-
-
-
-
-
3.3
3.3
External net flows3
(0.3)
2.8
0.5
0.3
0.1
3.4
3.3
6.7
Internal net flows
-
0.6
-
0.1
(0.1)
0.6
-
0.6
Total net flows
(0.3)
3.4
0.5
0.4
-
4.0
3.3
7.3
Market and other movements3
3.2
1.4
0.1
0.6
0.3
5.6
2.4
8.0
At 30 September 2013
265.0
87.7
71.5
10.4
8.0
442.6
151.4
594.0
External inflows
6.1
2.7
0.7
0.3
-
9.8
9.8
External outflows
(8.5)
(1.6)
(1.7)
(0.1)
-
(11.9)
(11.9)
Overlay net flows
-
-
-
-
-
-
2.2
2.2
External net flows3
(2.4)
1.1
(1.0)
0.2
-
(2.1)
2.2
0.1
Internal net flows
0.2
(0.8)
0.1
0.1
(0.1)
(0.5)
-
(0.5)
Total net flows
(2.2)
0.3
(0.9)
0.3
(0.1)
(2.6)
2.2
(0.4)
Market and other movements3
7.0
1.4
(0.2)
0.6
0.7
9.5
8.5
18.0
At 31 December 2013
269.8
89.4
70.4
11.3
8.6
449.5
162.1
611.6
1. Solutions includes liability driven investments and multi-asset funds.
2. Overlay assets comprise derivative notionals associated with Solutions business.
3. External net flows exclude movements in overlay assets which have a short maturity period as determined by client agreements (Q1 13: 22.4bn; H1 13: 21.9bn;
Q3 13: 24.3bn; FY 13: 32.8bn), and hence are subject to a higher degree of variability. The movement in these assets is therefore included in market and other
movements.
4. Includes 2.9bn of Legal & General France assets.
Legal & General investment management assets quarterly progression (continued)
3
3
3
3
3
3
3
months
months
months
months
months
months
months
to
to
to
to
to
to
to
30.09.14
30.06.14
31.03.14
31.12.13
30.09.13
30.06.13
31.03.13
bn
bn
bn
bn
bn
bn
bn
LGIM total assets net flows
(2.4)
1.4
9.0
(0.4)
7.3
6.2
7.2
Attributable to:
International1
1.3
2.5
3.4
1.8
6.4
0.6
7.0
UK Institutional
(2.4)
-
3.0
(1.6)
0.1
6.1
1.2
UK Retail2
-
0.2
0.3
0.1
0.3
0.3
(0.3)
Annuities3,4
(0.1)
(0.3)
3.2
(0.1)
1.4
0.1
-
Mature Businesses
(1.2)
(1.0)
(0.9)
(0.6)
(0.9)
(0.9)
(0.7)
1. Q3 13 International net flows include 2.9bn of Legal & General France assets.
2. Q2 14 UK Retail net flows include 0.7bn of assets previously managed externally.
3. Pension funds already managed by LGIM that switch into LGR annuities are excluded.
4. Q1 14 Annuities net flows includes 0.3bn of Lucida assets previously managed externally.
Assets under administration
Consol-
Mature
Overseas
idation
Retail
Retail
Work-
Suffolk
LGAS
adjust-
Total
Invest-
For the nine months
Platforms1
Savings2
place
Life
Savings
ment3
LGAS
ments4
Annuities
ended 30 September 2014
bn
bn
bn
bn
bn
bn
bn
bn
bn
As at 1 January 2014
64.1
36.3
8.7
6.6
4.5
(6.8)
113.4
20.5
34.4
Gross inflows5
7.6
1.1
2.0
1.0
0.3
(0.4)
11.6
3.1
3.9
Gross outflows
(3.6)
(3.4)
(0.5)
(0.4)
(0.3)
0.6
(7.6)
(3.7)
-
Payments to pensioners
-
-
-
-
-
-
-
-
(1.6)
Net flows
4.0
(2.3)
1.5
0.6
-
0.2
4.0
(0.6)
2.3
Market and other
movements
0.9
1.5
(0.1)
0.3
(0.1)
(0.2)
2.3
0.8
3.2
As at 30 September 2014
69.0
35.5
10.1
7.5
4.4
(6.8)
119.7
20.7
39.9
Consol-
Mature
Overseas
idation
Retail
Retail
Work-
Suffolk
LGAS
adjust-
Total
Invest-
For the nine months
Platforms1
Savings2
place
Life
Savings
ment3
LGAS
ments4
Annuities
ended 30 September 2013
bn
bn
bn
bn
bn
bn
bn
bn
bn
As at 1 January 2013
8.6
36.2
6.0
5.1
4.5
(1.4)
59.0
18.6
32.2
Gross inflows5
6.4
1.1
1.5
0.9
0.1
(0.1)
9.9
2.8
3.7
Gross outflows
(2.1)
(4.0)
(0.4)
(0.3)
(0.1)
0.3
(6.6)
(3.0)
-
Payments to pensioners
-
-
-
-
-
-
-
-
(1.4)
Net flows
4.3
(2.9)
1.1
0.6
-
0.2
3.3
(0.2)
2.3
Cofunds acquisition
45.7
-
-
-
-
(5.4)
40.3
-
-
Market and other
movements
(0.3)
2.7
0.8
0.4
-
-
3.6
1.4
-
As at 30 September 2013
58.3
36.0
7.9
6.1
4.5
(6.6)
106.2
19.8
34.5
1. Platforms includes Investor Portfolio Services (IPS) and Cofunds since acquisition.
2. Mature Retail Savings includes with-profits products, bonds and retail pensions.
3. Consolidation adjustment represents Suffolk Life and Mature Retail Savings assets included in the Platforms column.
4. Q3 14 Retail Investments includes 1.6bn (Q3 13: 1.4bn; FY 13: 1.5bn) of LGIM unit trust assets held on our Cofunds platform and 3.2bn (Q3 13: 3.1bn;
FY 13: 3.2bn) of LGIM unit trust assets held on our IPS platform.
5. Platforms gross inflows include Cofunds institutional net flows.
Assets under administration quarterly progression
Consol-
Mature
Overseas
idation
Retail
Retail
Work-
Suffolk
LGAS
adjust-
Total
Invest-
For the nine months
Platforms1
Savings2
place
Life
Savings
ment3
LGAS
ments4
Annuities
ended 30 September 2014
bn
bn
bn
bn
bn
bn
bn
bn
bn
At 1 January 2014
64.1
36.3
8.7
6.6
4.5
(6.8)
113.4
20.5
34.4
Gross inflows5
2.6
0.4
0.7
0.3
0.1
(0.1)
4.0
1.0
3.3
Gross outflows
(1.1)
(1.1)
(0.2)
(0.1)
(0.1)
0.2
(2.4)
(0.9)
-
Payments to pensioners
-
-
-
-
-
-
-
-
(0.5)
Net flows
1.5
(0.7)
0.5
0.2
-
0.1
1.6
0.1
2.8
Market and other
movements
-
0.5
(0.1)
0.1
(0.1)
(0.1)
0.3
0.2
1.1
At 31 March 2014
65.6
36.1
9.1
6.9
4.4
(6.8)
115.3
20.8
38.3
Gross inflows5
2.2
0.3
0.6
0.3
0.1
(0.1)
3.4
0.9
0.2
Gross outflows
(1.2)
(1.1)
(0.1)
(0.1)
(0.1)
0.2
(2.4)
(1.5)
-
Payments to pensioners
-
-
-
-
-
-
-
-
(0.5)
Net flows
1.0
(0.8)
0.5
0.2
-
0.1
1.0
(0.6)
(0.3)
Market and other
movements
0.8
0.6
(0.1)
0.1
0.1
-
1.5
0.4
0.5
At 30 June 2014
67.4
35.9
9.5
7.2
4.5
(6.7)
117.8
20.6
38.5
Gross inflows5
2.8
0.4
0.7
0.4
0.1
(0.2)
4.2
1.2
0.4
Gross outflows
(1.3)
(1.2)
(0.2)
(0.2)
(0.1)
0.2
(2.8)
(1.3)
-
Payments to pensioners
-
-
-
-
-
-
-
-
(0.6)
Net flows
1.5
(0.8)
0.5
0.2
-
-
1.4
(0.1)
(0.2)
Market and other
movements
0.1
0.4
0.1
0.1
(0.1)
(0.1)
0.5
0.2
1.6
At 30 September 2014
69.0
35.5
10.1
7.5
4.4
(6.8)
119.7
20.7
39.9
1. Platforms includes Investor Portfolio Services (IPS) and Cofunds since acquisition.
2. Mature Retail Savings includes with-profits products, bonds and retail pensions.
3. Consolidation adjustment represents Suffolk Life and Mature Retail Savings assets included in the Platforms column.
4. Q3 14 Retail Investments includes 1.6bn (Q1 14: 1.6bn; Q2 14: 1.5bn) of LGIM unit trust assets held on our Cofunds platform and 3.2bn (Q1 14: 3.2bn;
Q2 14: 3.2bn) of LGIM unit trust assets held on our IPS platform.
5. Platforms gross inflows include Cofunds institutional net flows.
Assets under administration quarterly progression (continued)
Consol-
Mature
Overseas
idation
Retail
Retail
Work-
Suffolk
LGAS
adjust-
Total
Invest-
For the year ended
Platforms1
Savings2
place
Life
Savings
ment3
LGAS
ments4
Annuities
31 December 2013
bn
bn
bn
bn
bn
bn
bn
bn
bn
At 1 January 2013
8.6
36.2
6.0
5.1
4.5
(1.4)
59.0
18.6
32.2
Gross inflows
0.2
0.4
0.5
0.2
0.1
-
1.4
0.7
0.8
Gross outflows
(0.2)
(1.2)
(0.2)
(0.1)
(0.1)
0.1
(1.7)
(1.1)
-
Payments to pensioners
-
-
-
-
-
-
-
-
(0.4)
Net flows
-
(0.8)
0.3
0.1
-
0.1
(0.3)
(0.4)
0.4
Market and other
movements
0.5
1.7
0.6
0.3
-
(0.1)
3.0
1.2
0.7
At 31 March 2013
9.1
37.1
6.9
5.5
4.5
(1.4)
61.7
19.4
33.3
Gross inflows5
1.7
0.4
0.5
0.3
-
-
2.9
1.1
0.6
Gross outflows
(0.7)
(1.4)
(0.1)
(0.1)
-
-
(2.3)
(1.0)
-
Payments to pensioners
-
-
-
-
-
-
-
-
(0.5)
Net flows
1.0
(1.0)
0.4
0.2
-
-
0.6
0.1
0.1
Cofunds acquisition
45.7
-
-
-
-
(5.4)
40.3
-
-
Market and other
movements
(2.1)
(0.4)
-
-
-
0.3
(2.2)
(0.4)
(1.2)
At 30 June 2013
53.7
35.7
7.3
5.7
4.5
(6.5)
100.4
19.1
32.2
Gross inflows5
4.5
0.3
0.5
0.4
-
(0.1)
5.6
1.0
2.3
Gross outflows
(1.2)
(1.4)
(0.1)
(0.1)
-
0.2
(2.6)
(0.9)
-
Payments to pensioners
-
-
-
-
-
-
-
-
(0.5)
Net flows
3.3
(1.1)
0.4
0.3
-
0.1
3.0
0.1
1.8
Market and other
movements
1.3
1.4
0.2
0.1
-
(0.2)
2.8
0.6
0.5
At 30 September 2013
58.3
36.0
7.9
6.1
4.5
(6.6)
106.2
19.8
34.5
Gross inflows5
4.6
0.3
0.6
0.4
-
(0.2)
5.7
0.8
0.3
Gross outflows
(1.0)
(1.1)
(0.2)
(0.1)
-
0.2
(2.2)
(0.7)
-
Payments to pensioners
-
-
-
-
-
-
-
-
(0.5)
Net flows
3.6
(0.8)
0.4
0.3
-
-
3.5
0.1
(0.2)
Market and other
movements
2.2
1.1
0.4
0.2
-
(0.2)
3.7
0.6
0.1
At 31 December 2013
64.1
36.3
8.7
6.6
4.5
(6.8)
113.4
20.5
34.4
1. Platforms includes Investor Portfolio Services (IPS) and Cofunds since acquisition.
2. Mature Retail Savings includes with-profits products, bonds and retail pensions.
3. Consolidation adjustment represents Suffolk Life and Mature Retail Savings assets included in the Platforms column.
4. FY 13 Retail Investments includes 1.5bn (Q1 13: 1.3bn; Q2 13: 1.3bn; Q3 13: 1.4bn) of LGIM unit trust assets held on our Cofunds platform and 3.2bn
(Q1 13: 3.1bn; Q2 13: 3.0bn; Q3 13: 3.1bn) of LGIM unit trust assets held on our IPS platform.
5. Platforms gross inflows include Cofunds institutional net flows.
Annuities single premiums
Single
Single
Single
premiums
premiums
premiums
30.09.14
30.09.13
31.12.13
m
m
m
Individual Annuities
508
1,077
1,277
Bulk Purchase Annuities
3,368
2,613
2,812
Total Annuities
3,876
3,690
4,089
Annuities single premiums quarterly progression
3
3
3
3
3
3
3
months
months
months
months
months
months
months
to
to
to
to
to
to
to
30.09.14
30.06.14
31.03.14
31.12.13
30.09.13
30.06.13
31.03.13
m
m
m
m
m
m
m
Individual Annuities
125
139
244
200
323
348
406
Bulk Purchase Annuities
233
90
3,045
199
1,943
313
357
Total Annuities
358
229
3,289
399
2,266
661
763
Insurance new business
Annual
Annual
Annual
premiums
premiums
premiums
30.09.14
30.09.13
31.12.13
m
m
m
UK Retail Protection
124
105
148
UK Group Protection
54
57
70
France Protection
33
21
21
Netherlands Protection
3
5
7
US Protection
70
73
99
Longevity Insurance
-
175
270
Total Insurance new business
284
436
615
Insurance new business annual premiums quarterly progression
3
3
3
3
3
3
3
months
months
months
months
months
months
months
to
to
to
to
to
to
to
30.09.14
30.06.14
31.03.14
31.12.13
30.09.13
30.06.13
31.03.13
m
m
m
m
m
m
m
UK Retail Protection
41
41
42
43
40
38
27
UK Group Protection
14
20
20
13
17
20
20
France Protection
-
-
33
-
-
-
21
Netherlands Protection
1
-
2
2
1
2
2
US Protection
23
24
23
26
28
23
22
Longevity Insurance
-
-
-
95
-
-
175
Total Insurance new business
79
85
120
179
86
83
267
Gross written premiums on Insurance business
9
9
12
months
months
months
to
to
to
30.09.14
30.09.13
31.12.13
m
m
m
UK Retail Protection
783
734
990
UK Group Protection
294
282
336
General Insurance
282
280
375
France Protection
132
127
168
Netherlands Protection
42
41
54
US Protection
494
482
654
Longevity Insurance
251
152
212
Total gross written premiums on Insurance business
2,278
2,098
2,789
Gross written premiums on Insurance business quarterly progression
3
3
3
3
3
3
3
months
months
months
months
months
months
months
to
to
to
to
to
to
to
30.09.14
30.06.14
31.03.14
31.12.13
30.09.13
30.06.13
31.03.13
m
m
m
m
m
m
m
UK Retail Protection
269
260
254
256
250
244
240
UK Group Protection
65
130
99
54
74
123
85
General Insurance
104
94
84
95
97
97
86
France Protection
41
45
46
41
41
43
43
Netherlands Protection
16
12
14
13
14
13
14
US Protection
162
170
162
172
156
172
154
Longevity Insurance
84
83
84
60
60
60
32
Total gross written premiums on Insurance
business
741
794
743
691
692
752
654
Overseas new business in local currency
Annual
Single
Annual
Single
premiums
premiums
APE
premiums
premiums
APE
APE
30.09.14
30.09.14
30.09.14
30.09.13
30.09.13
30.09.13
31.12.13
US Protection (US$m)
117
-
117
113
-
113
155
Netherlands (m)
5
68
12
8
98
18
23
France (m)
40
254
65
30
214
51
57
India (Rs m) - Group's 26% interest
342
2,943
636
427
3,903
817
917
Egypt (Pounds m) - Group's 55% interest
121
-
121
107
-
107
136
Gulf (US$m) - Group's 50% interest
2
2
2
3
3
3
3
Worldwide new business
Annual
Single
Annual
Single
premiums
premiums
APE
premiums
premiums
APE
APE
30.09.14
30.09.14
30.09.14
30.09.13
30.09.13
30.09.13
31.12.13
m
m
m
m
m
m
m
Individual Annuities
-
508
51
-
1,077
108
128
Bulk Purchase Annuities
-
3,368
337
-
2,613
261
281
Total LGR1
-
3,876
388
-
3,690
369
409
UK Retail Protection
124
-
124
105
-
105
148
UK Group Protection
54
-
54
57
-
57
70
France
33
206
54
25
186
44
48
Netherlands
4
54
9
7
84
15
19
Workplace Savings
461
692
530
434
608
495
735
Platforms (Cofunds & IPS)2
47
2,861
333
25
1,638
189
288
Suffolk Life
-
940
94
-
894
89
133
Mature Retail Savings3
7
597
67
8
570
65
90
With-profits
42
59
48
38
62
44
61
Total LGAS
772
5,409
1,313
699
4,042
1,103
1,592
Retail Investments4
11
2,913
302
9
2,628
272
355
US Protection
70
-
70
73
-
73
99
India (26% share)
3
29
6
5
42
9
10
Egypt (55% share)
10
-
10
10
-
10
13
Gulf (50% share)
1
1
1
2
2
2
2
Total Emerging Markets new business
14
30
17
17
44
21
25
Total Worldwide new business
867
12,228
2,090
798
10,404
1,838
2,480
1. Total LGR new business excludes nil (Q3 13: 175m; FY 13: 270m) of APE in relation to longevity insurance transactions. It is not included in the table due to
the unpredictable deal flow from this type of business.
2. Platforms APE includes retail business only.
3. Includes bonds and retail pensions.
4. Includes retail unit trusts and structured products only.
Worldwide new business APE quarterly progression
3
3
3
3
3
3
3
months
months
months
months
months
months
months
to
to
to
to
to
to
to
30.09.14
30.06.14
31.03.14
31.12.13
30.09.13
30.06.13
31.03.13
m
m
m
m
m
m
m
Individual Annuities
13
14
24
20
33
35
40
Bulk Purchase Annuities
23
9
305
20
194
31
36
Total LGR1
36
23
329
40
227
66
76
UK Retail Protection
41
41
42
43
40
38
27
UK Group Protection
14
20
20
13
17
20
20
France
7
7
40
4
7
6
31
Netherlands
2
2
5
4
4
4
7
Workplace Savings
169
183
178
240
166
127
202
Platforms (Cofunds & IPS)2
116
114
103
99
94
69
26
Suffolk Life
29
30
35
44
39
31
19
Mature Retail Savings3
24
21
22
25
21
22
22
With-profits
13
17
18
17
13
14
17
Total LGAS
415
435
463
489
401
331
371
Retail Investments4
111
91
100
83
94
104
74
US Protection
23
24
23
26
28
23
22
India (26% share)
1
2
3
1
2
1
6
Egypt (55% share)
3
3
4
3
3
3
4
Gulf (50% share)
-
-
1
-
1
-
1
Total Emerging Markets new business
4
5
8
4
6
4
11
Total Worldwide new business
589
578
923
642
756
528
554
1. Total LGR new business excludes nil (Q3 13: 175m; FY 13: 270m) of APE in relation to longevity insurance transactions. It is not included in the table due to
the unpredictable deal flow from this type of business.
2. Platforms APE includes retail business only.
3. Includes bonds and retail pensions.
4. Includes retail unit trusts and structured products only.
Worldwide APE by channel
Annual
Single
premiums
premiums
APE
% of
For the nine months ended 30 September 2014
m
m
m
total
Employee benefit consultants
584
4,141
998
48
Retail independent and restricted
186
6,700
856
41
Tied including bancassurance
73
960
169
8
Direct
24
427
67
3
Total Worldwide APE by channel
867
12,228
2,090
100
Annual
Single
premiums
premiums
APE
% of
For the nine months ended 30 September 2013
m
m
m
total
Employee benefit consultants1
548
3,254
873
47
Retail independent and restricted
162
5,740
736
40
Tied including bancassurance
68
1,076
176
10
Direct
20
334
53
3
Total Worldwide APE by channel
798
10,404
1,838
100
1. Includes Lucida business since acquisition in Q3 13.
Annual
Single
premiums
premiums
APE
% of
For the year ended 31 December 2013
m
m
m
total
Employee benefit consultants1
796
3,597
1,156
47
Retail independent and restricted
228
7,871
1,015
41
Tied including bancassurance
95
1,418
237
10
Direct
27
449
72
2
Total Worldwide APE by channel
1,146
13,335
2,480
100
1. Includes Lucida business since acquisition in Q3 13.
Worldwide APE by channel quarterly progression
3
3
3
3
3
3
3
months
months
months
months
months
months
months
to
to
to
to
to
to
to
30.09.14
30.06.14
31.03.14
31.12.13
30.09.13
30.06.13
31.03.13
m
m
m
m
m
m
m
Employee benefit consultants1
219
225
554
283
386
191
296
Retail independent and restricted
295
272
289
279
295
259
182
Tied including bancassurance
51
59
59
61
58
59
59
Direct
24
22
21
19
17
19
17
Total Worldwide APE by channel
589
578
923
642
756
528
554
1. Includes Lucida business since acquisition in Q3 13.
This information is provided by RNSThe company news service from the London Stock ExchangeENDIMSVXLFBZFFZFBL
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